ERC on track to complete rate reset for grid operator

THE Energy Regulatory Commission (ERC) said it is on track to complete the rate reset process for the National Grid Corp. of the Philippines (NGCP).

At a Senate budget hearing on Wednesday, ERC Commissioner Catherine P. Maceda said the commission is preparing to publish the final draft determination for the NGCP’s fourth regulatory period (RP) within the month.

“We are outlining the draft final determination and hopefully that can be posted within this month,” Ms. Maceda said.

The rate reset process is usually a “forward-looking” exercise that requires the regulated entity to submit forecast expenditures and proposed projects over a five-year regulatory period. The ERC assesses the actual performance of the entity and adjusts rates as needed.

The fourth regulatory period covers the years 2016 to 2022, and includes the lapsed period of two years.

According to the ERC, the 4^th RP is “unique because it covers a past period, thus requiring evaluation of historical data on NGCP’s expenditures and performance.”

In November, the ERC capped the revenue that the NGCP is allowed to generate at P36.7 billion a year, well below the annual average of P77.56 billion it applied for Phase 1, based on the commission’s partial initial determination.

The draft final determination will be posted to allow for public comment, Ms. Maceda said.

“The commission will review (the public comment) before deciding on the final determination,” she said. — Sheldeen Joy Talavera